Court rejects Absas R6.7 million 372,000 loan bid over disarrayed accounting, citing inconsistent bank statements and insufficient debt evidence.
New CEO Kenny Fihla faces major legal blow as Johannesburg court demands full trial over disputed loan and conflicting arrears.
Absas accounting errors spark consumer warnings, even as the bank pushes pan-African growth and green finance investment plans.
Absa Group, the Johannesburg-based financial services provider, under newly appointed CEO Kenny Fihla, faced a major legal setback last week. The Johannesburg High Court dismissed Absas bid to seize property as repayment for a disputed R6.7 million 372,000 loan, citing disarray and conflicting accounting statements within the banks records.
Court slams Absas accounting, calls for trialJudge NS Kruger ruled that Absas bookkeeping was inconsistent, with one hand unaware of what the other is doing. The court rejected Absas application for summary judgment, insisting the matter requires full trial and mediation, which the bank had declined.
The dispute centers on Gola Trading and Projects, which signed a mortgage-backed business loan in 2021 for R5.6 million 310,000, plus an additional R1.12 million 62,000 owed. When the bank claimed arrears of R434,324 24,000 based on five missed installments, Gola contested these figures, presenting statements showing fluctuating arrears and payments made between June and October 2023.
Conflicting loan statements and disputed arrearsAbsas claim fluctuated widelyfrom zero arrears to over R5 million 277,000 in disputed amounts within months. Gola and co-respondents argued that Absas acceptance of payments after the alleged loan cancellation suggested the contract was still active or reinstated. The banks own affidavits admitted to errors and incomplete accounting.
The court found Absas evidence insufficiently clear to establish the exact debt or arrears, highlighting the inconsistent bank statements and lack of clear breach notification in the loan contract. Consumer legal expert Leonard Benjamin emphasized the importance of challenging bank calculations, citing frequent errors in interest rates, charges, and arrears claims. Few defendants have access to proper documentation but can use court procedures to demand them, Benjamin added.